World’s largest companies started to take a look at a new generation of startups for disruptive solutions that are aligned with their global interests.Anirban Sen | ET Bureau | September 24, 2015, 08:19 IST

Ahead of PM Narendra Modi’s trip to Silicon Valley to engage with top CEOs, some of the world’s largest companies started to take a look at a new generation of startups and early-stage companies in Bengaluru - India’s Silicon Valley - developing disruptive solutions that are aligned with their global interests.

This week, General Electric Chairman Jeffrey R Immelt listened to pitches from half-a-dozen startups and a presentation from Nandan Nilekani, a mentor with software products think tank iSPIRT and co-founder of Infosys, India’s most successful startup. It was a 45-minute session and each startup got about 5-6 minutes to make its presentation — and Immelt was impressed with what he saw, said one of the people present.

Immelt is not alone. Over the past few months, executives such as Target CIO Mike McNamara, Visa technology head Rajat Taneja and Lowe’s Chief Information Officer Paul Ramsay have flown to Bengaluru and met startups - some even earmarking funds to invest in disruptive companies that align with their global businesses, according to people familiar with these meetings who requested anonymity.

After decades of leveraging India as a low-cost outsourcing destination, companies such as GE and General Motors are starting to bet on startups that are creating disruptive solutions in areas such as the Internet of Things (IoT) and industrial Internet, which is the integration of appliances and machinery with sensors and software that are networked.

“Part of the reason we’re here (in Bengaluru) is because of the entrepreneurial, technology capability we see here. This is a happening place. And we absolutely want to be part of that,” Ramsay of Lowe’s said in an interview with ET in August.

Startups playing key role

Startups such as Julia Computing, Savari, Nimble Wireless and Logistimo are quietly starting to play an increasingly important role in the fortunes of some of the world’s most well-renowned corporate brands.

Julia Computing was founded earlier this year by former Unique Identification Authority of India executive Viral Shah and fellow research scientists and programmers Stefan Karpinski, Jeff Bezanson and Alan Edelman, after they decided to commercialise their earlier creation — the open-source programming language Julia.

“With the explosion of devices that has happened thanks to IoT, many companies are waking up to the fact that there are not enough people who can programme well - with an open source language like Julia, we have a powerful language that can solve that problem,” said Shah.

Some like GE are pumping hundreds of millions of dollars into building capabilities in the area of industrial Internet, hiring top data scientists and programmers and partnering with startups to leverage solutions, including open-source programming languages that can potentially act as a platform for all their software bets.

Others such as Target and Lowe’s - long-time customers of India’s outsourcing industry - are creating corporate accelerator programmes to scoop up solutions from promising Indian startups.

“What a startup like Julia Computing does is connect the iron to the silicon,” said Sharad Sharma, co-founder of iSPIRT. “It is a democratising force…and you need democratised devices in the world of high-powered computing. What’s important to note is the fact that India has been quietly innovating in this space.”

Disrupting traditional businesses

“Tech companies are disrupting traditional businesses. And these traditional businesses are reacting to this disruption,” said Shekhar Kirani, a partner at Accel India and an iSPIRT Fellow. “These traditional enterprises are looking to innovate and to work with startups.”

One such startup is Savari, which was created during the global recession of 2008 that severely impacted North American automakers, among others. Savari, which has offices in Bengaluru, Silicon Valley and auto hub Detroit, is building solutions that can connect cars and make them “talk to each other”.

“We have become a supplier to an automotive industry consortium focussed on safety. We have not only validated our technology with the automotive OEMs (original equipment manufacturers) but also became a key supplier to the national pilot programme conducted by US Department of Transportation,” said Ravi Puvvala, CEO of Savari.

“The automotive industry will see more disruption in the next 20 years than in the past 70 years put together,” said Sharma. “And you have a startup from Jayanagar (Savari) that is quietly playing a role in the world of connected cars.”

Some startups are even stepping into areas where only the likes of Google and Facebook have dared to venture - providing Internet access to remote parts of the world using devices such as “Internet balloons” or drones.

For aerospace startup Team Indus, that is their next big moonshot. Fortunately for them, some of the world’s largest companies are starting to pay close attention to the bets they’re making.